In 2007, A small team of Amazon employees had been working for a few years on a new ebook reader project they’d eventually call the Kindle. Amazon CEO Jeff Bezos was eager to finish and sell the thing; he was certain Apple or Google was working on something similar, and didn’t want them to beat Amazon to market. The team, sequestered away in an old law office in Seattle, working among racks of the very books they planned to make obsolete, had already gotten a lot of things right. But one part still eluded them.

. . . .

“We knew we wanted it to be a wireless device that had no contract for customers,” Kessel says, but nothing like that existed. So Amazon worked with Qualcomm to build a system called Whispernet, which gave every Kindle owner free 3G connectivity so they could download books from anywhere. The feature felt like magic—both to the Kindle team and to early Kindle buyers. If you had to pick just one thing that made the Kindle a success, it was this.

. . . .

Since then, the device has torn through the publishing landscape. Not only is Amazon the most powerful player in the industry, it has built an entire book-based universe all its own. “Kindle” has become a platform, not a device. Like Amazon tends to do, it entered the market and utterly subsumed it.

Now, however, Amazon’s ebook project comes to a crossroads. The Kindle team has always professed two goals: to perfectly mimic a paper book, and to extend and improve the reading experience. That’s what readers want, too. In a world filled with distractions and notifications and devices that do everything, the Kindle’s lack of features becomes its greatest asset. But readers also want to read everywhere, in places and ways a paperback can’t manage. They want more tools, more features, more options, more stuff to do. Amazon’s still working out how to satisfy both sides.

. . . .

Everyone at Amazon likes to say that paper is great technology, and they seem genuinely uninterested in rendering paper obsolete. They’re just trying to make paper that connects to the internet. The Kindle they’ve always imagined is thin as paper, as light as paper, as flexible and durable as paper.

. . . .

Next up, flexibility seems at the top of the Kindle team’s minds. Building a Kindle “like paper” would mean one that can be rolled, folded, dog-eared, and turned into a paper airplane, and the beginnings of that tech is already showing up in prototypes and concept devices around the world.

. . . .

“The more that we’re distracted, the more valuable solitude becomes,” says Dave Limp, Amazon’s head of hardware. “The last thing I want is being absorbed into an author’s story, and get an uplevel notification for Angry Birds.” Reading is about focus, about falling out of your life and into a story, and so the Kindle is about those things too.

. . . .

Amazon won the ebook market in a landslide, though it’s not clear how large a prize that really is. Some data shows ebook sales declining as print makes an unexpected surge, while other studies say digital reading continues to grow steadily. What’s crystal clear is that ebooks won’t unseat print anytime soon. People like the feel of a book, like the sense of place they get from holding the opened pages in their two hands, like the way they look on a coffee table. The Pew Research Center found that 65 percent of US adults said they’d read a print book in 2016, out of 73 percent who said they’d read a book at all. The only thing that will kill print books is when people stop reading altogether.

There is one part of people’s reading habits has changed dramatically over the last few years. That same Pew study found that people were nearly four times as likely to read a book on a tablet in 2016 as they had been five years earlier. They were also nearly twice as likely to read on their phones, and reading on a laptop or desktop PC spiked as well. All three are now more popular than reading on an e-reader.

. . . .

Limp says there was a debate over what to do, but also says it didn’t last very long. “You can’t tell them where they want to read,” he says. “They’re going to tell you where they want to read, and you have to be there.” So they built apps for everybody’s phones and tablets, and even the Chrome browser.

. . . .

For a decade, Amazon’s relentlessly offered new ways for people to read books. But even as platforms change, books haven’t, and the incompatibility is beginning to show. Phones and tablets contain nothing of what makes a paperback wonderful.

. . . .

“The Kindle’s aura of bookishness was the modern equivalent of the Gutenberg Bible’s aura of scribalness,” Nicholas Carr, the author and media scholar, wrote in 2011. “It was essentially a marketing tactic, a way to make traditional book readers comfortable with e-books. But it was never anything more than a temporary tactic.” Carr should have been right, but six years later nothing’s really changed.

The next phase for the digital book seems likely to not resemble print at all. Instead, the next step is for authors, publishers, and readers to take advantage of all the tools now at their disposal and figure out how to reinvent longform reading.

. . . .

If Amazon wanted to, it could with a single act bring a new form of book into being.

The thing that many outsiders keep missing is that Amazon won the ebook market by giving consumers exactly the same stories they were already reading, only in a new package. Yes, Amazon invested huge sums in making the Kindle platform friction-free, but when you come down to it the content being delivered was the same as before – the only change was the medium it was delivered on.

And that is why it succeeded where previous attempts faltered. Amazon gave consumers the content they already wanted, only on a new medium that let readers carry hundred of books at a time.

PG agrees with Nate about the same content in a new medium. PG would also be happy to have something better than a book show up, but, while he has read hundreds of magazine articles about new technology that will replace words on a screen, he hasn’t seen anything that looks very likely to do the job performed by books any better.

Journalists always have the idea that people want movies more than they want books. So text-only books are going to disappear in favor of a book-like thing that will have sound and video and interactive stuff that will magically work together and be better than text on a page or screen.

PG says large numbers of people like movies and TV shows and books, but there is no indication yet that those people really want something that smooshes all of those things together into a single storytelling experience with tiny actors and actresses dancing across a little screen interspersed with a series of MRI images and a video of a doctor explaining the symptoms of foot and ankle injuries.

PG suggests that one of the cool things about ebooks is that they don’t require big production budgets like movies do. If you’re going to create a successful movie or tv show, you need to find a large audience that is collectively willing to pay a lot of money to watch the production or, alternatively, watch a lot of commercials from businesses who are willing to spend a lot of money to interrupt the movie with commercials.

You need a mass market to fund mass market media.

In the age of ebooks, an individual author can fund the complete book creation process all by herself or himself. Creation requires time and a computer of some sort. Even a clunky old computer will serve to operate a word processing program and run a browser for uploading ebook files. You can probably use one at the library for free.

So a self-funded author combines with an ultra-low-cost distribution system like KDP to provide low-priced ebooks. And she doesn’t need a mass market for her books.

The author can make a living by creating books for a much smaller audience than is required for a traditionally-published book where sales have to support (1) Ingram and (2) Barnes & Noble plus pay for a lot of (3) expensive publishing people in New York and also (4) send a bunch of money to France or Germany or somewhere else where the (5) Big Bosses and (6) owners live.

So an indie author can find enough readers on Amazon who are willing to pay $2.99 for mysteries featuring a near-sighted ornithologist as amateur sleuth to quit her day job and live comfortably in Omaha. And another indie author can do the same with a mystery series featuring a far-sighted professor of philately as amateur sleuth while New York publishers continue to desperately search for the next James Patterson because those publishers are stuck in the million-seller business.

While PG has read a lot of tech magazine articles about high-tech devices that combine all possible entertainment options into something that fits in your pocket or purse and will immerse you so totally that you’ll never want to put it down, he doesn’t recall any similar stories about the impact of online bookstores on readers and authors.

[I]n the realm of IP one of the questions that have been asked with increasing frequency is whether and to what extent AI has the potential to replace humans, including in the creative fields.

As AI machines become increasingly autonomous, can they be regarded as ‘authors’ in a copyright sense and, if so, can the works they create be eligible for copyright protection? If the answer was again in the affirmative, who would own the copyright in such works?

. . . .

For instance, readers with an interest in music might have had the opportunity to listen to the recently released single Hello Shadow, which is the first song extracted from the the first multi-artist music album composed with AI.

This album was curated by Benoit Carré, head of SKYGGE, who collaborated with several musicians and performers, including – in the case of Hello Shadow – Stromae and Kiesza.

The SKYGGE project started as a research project (the Flow-Machines project, conducted at Sony Computer Science Laboratories and University Paris 6) in which scientists were looking for algorithms to capture and reproduce musical “style” [an example being Daddy’s car, a song in the style of the Beatles]. However, the novelty and huge potential of the approach triggered the attention of musicians who joined the team.It is clear that SKYGGE produces music thanks to AI, but there is a substantial human input. But as things have the potential to develop in the sense that AI will be able to create music entirely on its own, without any human input, will the resulting songs be protected by copyright?

. . . .

[A]t the international level there is no definition of who is to be regarded as an ‘author’ in a copyright sense. However, legal scholarship seems oriented in the sense of concluding that, from its text and historical context, under the Berne Convention only natural persons who created the work can be regarded as authors.

In any case, although generally speaking it seems possible “to agree that an author is a human being who exercises subjective judgment in composing the work and who controls its execution”, this does not mean that at the national level there are not situations in which also works created by non-human authors can qualify for protection, or courts have not addressed issues of non-human authorship.

. . . .

Harmonization of the standard of originality at the EU level has been limited. Only the Software Directive (Article 1(3)), the Database Directive (Article 3(1)) and the Term Directive (Article 6) provide that, respectively, for computer programs, databases and photographs copyright protection shall be only available if they are their “author’s own intellectual creation”.

. . . .

One may wonder how a non-human author can exercise such rights. The question becomes even more complex, if not impossible to solve, if one considers that the CJEU has clarified that the language of that directive imposes that authors are considered as the exclusive first owners of economic rights.

PG stifled an OCD impulse to figure out a way to determine how many sentences and words are contained in those 16,130 posts.

PG doesn’t think MS Word is up to the task, but he’s never tried. (OCD stifling is going quite well at the moment.)

However, PG wondered if he could create a short program to rearrange segments of the 16,130 posts to create an almost infinite number of new posts and transform TPV into a perpetual blog.

(PG understands that perpetual motion devices are supposed to be impossible, but, since blog posts don’t contain motion, physics may not negate the concept of a perpetual blog. PG will stop trying to think about physics now.)

PG couldn’t stop wondering whether MS Word could be up to some sort of word-counting task for those 16,130 blog posts (OCD scores one point). Quite frankly, he had his doubts about MS Word.

So, he copied and pasted 20 copies of the ms from Mrs. PG’s forthcoming novel into a single MS Word file, expecting the word-counting function to fail.

PG apologizes to all the programmers in Redmond.

20 copies of Mrs. PG’s next book contain:

2081 pages (MS Word manuscript pages, not pages in a printed book or ebook pages)

43,500 paragraphs

1,154,740 words

6,295,780 characters (with spaces)

As PG looks at these numbers, he may need to retract his apologies.

Other than the page count, MS Word says that 1) the number of paragraphs, 2) the number of words and 3) the number of characters in 20 copies of Mrs. PG’s next book are each divisible by 10.

What are the chances of this happening? (PG is becoming tired of numbers, so he won’t go down that path).

Ever dubious, PG suspected a bit of fudging by the programmer responsible for the word count feature in MS Word. Was Microsoft just guessing?

He was about to make an accusation.

But first, he added a single character to this monstrous file.

(pregnant pause)

(no sexism intended)

And . . .

the characters count increased by 1. To a number not divisible by 10.

Then he entered a space and another single character.

And the word count increased by 1 while the character count increased by 2 (one space and one character).

Then he hit the Enter key and another single character.

And the paragraph count increased by 1 with character and word count each incrementing properly.

PG can confirm that the paragraph, word and character counting algorithms in his copy of MS Word appear to be accurate (No, he’s not going to personally count words. He’s an attorney, not an accountant.), at least for a document containing 20 copies of Mrs. PG’s next book.

He unconditionally withdraws any and all disparaging comments directed towards any and all nameless programmers in Redmond.

Publishing reporters doing wrap up stories occasionally call me for impressions. From those conversations I have gleaned that the prevailing impression of where the book business is now is of “stability”. The consensus about adult trade is that ebook sales have stalled or perhaps even receded, that print is strong, and that the big publishers have beaten back the threat of disruption from indies that a few short years ago seemed like a massive threat.

But while that picture has accurate aspects, it is really incomplete. The world of commercial publishing — even factoring in the growth in juvie books and audio — is shrinking more slowly than it was a few years ago, but it is still shrinking. One “tell” is that Amazon doesn’t believe ebook sales are reducing, they see them growing. Part of that is that Kindle is taking market share from all the other ebook platforms (except possibly Apple iBooks, at the moment). Part of that is that Kindle has titles nobody else has, as some self-publishing entities just use the dominant platform and skip the rest. Part of that is that Kindle doesn’t just sell ebooks; it provides subscription access through Kindle Unlimited that in the aggregate logs a lot of eyeball hours. And almost no big publisher commercial content is included in Kindle Unlimited.

. . . .

The impression that big publishing is shrinking has anecdotal support. S&S CEO Carolyn Reidy . . . recently acknowledged that romance fiction had become very challenging for conventional publishers. Of course, genre fiction is precisely the area where indie authors and Kindle Unlimited have made the biggest inroads.

. . . .

But while maintaining ebook prices well north of ten dollars may be what Barnes & Noble and indie bookstores need to keep selling printed books, those prices cut publishers off from growing chunks of the market that prefer to choose from the wealth of much cheaper books on offer from indie authors and smaller, often digital-first, publishers.

. . . .

The under-reported media story of the 21st century is how well book publishers have adapted to their new world, better than their counterparts in any other print content business. Top line revenue for the majors is flat or shrinking slightly, but profits have been maintained. One big reason for that is that returns go down as sales move online, and print sales are now in the neighborhood of half online. Profitability in these circumstances underscores the point that Amazon is the most profitable account for just about every publisher. It moves half or more of the books, requires minimal staffing to cover, and has, by normal standards, very low returns.

The challenge, of course, is that Amazon has no interest in being publishers’ most profitable account. Amazon does everything they can to claw back margin from publishers and always has a looming threat with their own publishing program, which at any time could reconsider the idea it abandoned a few years ago of going after big trade books outside the genres.

The process of a particular style of creative destruction, described as disruptive innovation by now-famous Harvard Business School professor Clayton Christensen in his 1997 book, The Innovator’s Dilemma, is something PG has observed over and over, primarily among technology companies, but not limited to that business sphere.

PG is not alone in his appreciation for Professor Christensen. The Innovator’s Dilemma has been included on countless lists of the best business books of all time. See, for example, here, here, here, and here.

A few of the victims of disruptive innovation in the technology world, a space with which PG is quite familiar, include names that were once dominant in their industries: Kodak, Nokia, Blackberry, Wang, Sun, Lotus, WordPerfect, Borland, and Novell, to name just a few.

Apropos of the bookstore world, major retail companies and industries based upon people coming into physical spaces to purchase products have either disappeared or are disappearing in the face of technology innovations including, but not limited to Amazon’s. See, for example: Sears, Montgomery Ward, Macy’s, KMart, Blockbuster and Borders.

According to Time, 1,500 shopping malls were built in the U.S. between 1956 and 2005, but, today, these great retail inventions of the latter part of the 20th century, are closing down at an increasingly rapid pace. Between 2010 and 2013, mall visits during the holiday season, the busiest shopping time of the year, dropped by 50%.

There are still about 1,100 malls in the U.S. today, but a quarter of them are at risk of closing over the next five years, according to estimates from Credit Suisse. Other analysts predict the number of malls closing be even higher.

A growing number of Americans, however, don’t see the need to go to any Macy’s at all. Our digital lives are frictionless and ruthlessly efficient, with retail and romance available at a click. Malls were designed for leisure, abundance, ambling. You parked and planned to spend some time. Today, much of that time has been given over to busier lives and second jobs and apps that let you swipe right instead of haunt the food court. Malls, says Harvard business professor Leonard Schlesinger, “were built for patterns of social interaction that increasingly don’t exist.”

PG says bookstores aren’t special retail snowflakes. The forces impacting malls are no different in their effect on physical bookstores. The only remaining major US physical retail outlet for list-price hardcover/paperback books is, of course, Barnes & Noble. Borders has already disappeared as have B. Dalton, Coles, Crown Books, Hastings, Krochs & Brentanos, Mediaplay and Waldenbooks.

PG suggests that three categories of disruptive change are impacting the traditional book business:

Ecommerce

Ebooks

Profitable self-publishing via Kindle Direct

If ecommerce alone is enough to radically change the world for many physical retailers, imagine what two additional disruptive developments will do to traditional publishers and retail outlets for books.

Mike notes a fourth major development in the OP: Amazon is the most profitable place for major publishers to sell books.

Viewed properly, ebooks are a gift from heaven for traditional publishing profits:

Create and upload a digital file to Amazon and other ebook outlets.

Periodically check to see how much money arrived via bank transfers.

Yet Amazon is traditional publishing’s Great Satan because (with no malice that PG has observed) Amazon is changing power dynamics in publishing.

For one thing, Amazon likes to sell things at low prices, lower than prices charged anywhere else, including other places where books are sold.

For a second thing, one of Amazon’s earliest decisions was to make it easy for authors to self-publish both ebooks and POD paperbacks. Amazon also made it profitable for a great many authors to self publish through royalty structures that are vastly more beneficial to authors than those in traditional publishing contracts.

Easy and profitable. What’s not to like?

In the OP, Mike quotes the S&S CEO as admitting that romance books “had become very challenging for conventional publishers.”

Well, of course.

Why? (besides easy and profitable)

Romance authors have traditionally been treated in a disrespectful and condescending manner by a great many mainstream publishers. Since romance has always (or at least for a long time) sold large numbers of books to loyal readers, PG has wondered why. Perhaps it’s a perceived social or class thing. Publishers may regard romance as a necessary evil of their business, not deserving of the star treatment they provide for authors writing about more respectable characters and subjects, the kind of people who would have attended Wellesley.

Perhaps as a result of past disrespect which has toughened them up, a lot of smart women who write romance were happy to give KDP and other epublishing platforms a try. The computers didn’t care if you attended Wellesley or not, plus ebooks paid a lot better, you were in control and could write as many books as you wanted to. Plus, your readers had no problems locating and purchasing your books without dealing with sometimes-arrogant book store employees.

Amazon hearts romance authors. What’s not to like about that?

(No offence is intended toward Wellesley graduates, whether they write romance or not. PG’s grandmother graduated from Wellesley a very long time ago. She was a very nice person with a college friend she called Bunny.)

In PG’s surpassingly humble opinion, a variety of poor business decisions extending over many years have made it likely that an increasing number of traditional publishers will cease to be profitable in the foreseeable future. Poor profitability has been masked in recent years through a large number of mergers and acquisitions, but eventually that solution will dry up.

When a traditional publisher runs into financial trouble and is acquired by an investment bank or some other entity with a modicum of financial acumen, guess what’s going to happen.

Costs of the newly-acquired publishing business will be examined in detail with particular attention being paid to potential cost savings.

Sources of income will be examined with their fully-loaded costs, including personnel costs associated with each stream of income, to determine their true profitability.

The new owners will determine that ebooks are by far the most profitable part of the publishing business.

The new owners will determine that a huge number of expenses are tied to printed book operations, including a large portion of the firm’s overall personnel expenses and costs of third-party service providers that enable printed book operations.

The new owners will attempt to outsource tasks performed in-house such as editing and as much of the content acquisition labor as possible.

Layoffs, including elimination of layers of management no longer needed in the leaner publishing organization, will be a rational step for new owners who want to harvest income from the publisher.

If the real costs of print books cannot be reduced enough to reach target profitability, print prices will be increased.

If print can’t be made profitable, print rights will be sold to the highest bidder and further layoffs will follow.

Needless to say, all the changes in traditional publishing directed by the new owners will result in substantial anxiety for a great many traditionally-published authors. At a minimum, after selling off remaining stocks of an author’s print books, future print runs will either be substantially reduced or eliminated, depending upon the profitability of the individual author’s print titles when considering all associated costs.

If financial analysis causes a traditionally-published author to fall into the harvesting profits bin, he/she will be a line on a computer ledger and all expenses associated with the author’s books will be cut to bare minimums.

Circling back to Barnes & Noble, PG’s assessment is that the company is coasting along, riding modest waves of print customers who are coming to Barnes & Noble as more and more meatspace retail outlets for physical books disappear. PG reads some of the transcripts of quarterly earnings calls for BN and has observed the quality of top management decline under the revolving-door CEO direction of Mr. Riggio. PG suggests that it is unlikely for any salvational innovation to appear from this group of employees.

In PG’s earnestly humble opinion, Barnes & Noble will either collapse a la Borders or transition into the hands of financial types who deal in distressed businesses a la Sears.

Independent presses are a lifeline in the publishing world. At a time when large publishing houses are merging into even larger conglomerates, writers may feel like finding a home for their work requires a very specific, and at times corporate, mindset. But indies show that there’s another way. Via contests, open calls for submissions (for agented and unagented writers), and targeted requests, independent presses provide an alternate arena, making publishing more of a reality for marginalized artists and those with unique voices and writing styles. Plus, they’re getting more and more recognition.

. . . .

Jennifer Baker: In a world full of presses, why did you decide to create yours and what stands out about it that you saw lacking in the marketplace?

Rosalie Morales Kearns: I started Shade Mountain Press in 2013, and launched its first two books in 2014. Our focus is on literary fiction by women. As a feminist, I certainly am not surprised by the VIDA count and other research showing how underrepresented women are in terms of their work being reviewed in the major venues, winning literary awards, being taught in university classes, and being taken seriously in general. Living in a white supremacist culture, I’m not surprised that women of color are even more drastically underrepresented. But perhaps I had a utopian vision that the small press world was more egalitarian, more inclusive, etc. I learned how wrong I was when I was seeking a publisher for my short story collection Virgins & Tricksters. It ended up being published in 2012 by Aqueous Books, a woman-owned press. But before that, as I researched small presses, I kept coming across publishers that praised themselves for being willing to take chances on less commercial work. Then I’d look at their new and forthcoming lists, and see seven out of eight titles by men, nine out of ten titles by men, sometimes 100% of their titles by men.

. . . .

JB: What questions should authors be asking of their publishers in general? Authors may consider publication as that final step but there’s so much more to it.

RMK: Authors should get a really clear idea of their publisher’s timetable, and make sure that the publisher is intending to send out advance reader copies, in hard copy, in a sufficient number and in a timely way (four or ideally more months before publication date).

If the publisher is going to do a very light edit, they should be clear on that with the author, so that the author understands they will have to do various rounds of proofreading themselves. My press hires a professional proofreader, and I also do proofreading at later stages, when I’m working with the book designer and then when the file is converted to ebook format. All kinds of glitches can creep in in the layout stage and in the ebook stage.

The publisher should also be clear about how much of the publicity work will be on the author, and the author needs to realize that this could take a lot of time. As a publisher I take charge of creating copy for book jackets, for the press release, and for other promotional materials (frankly, a lot of authors just aren’t that good at describing their own work). Also I handle the work of identifying possible reviewers, querying them, following up, etc.. But that being said, it’s certainly a common practice at very small presses to let the authors create the copy and do the legwork in identifying and contacting reviewers. Small-press publishers have only so much time.

If the CEO of a publisher is spending a lot of time proofreading, exactly what value is the author receiving from a publishing relationship that likely results in the publisher receiving most of the money the author’s book generates? Proofreading services can be obtained elsewhere at a lower price.

PG checked the websites of the three publishers featured in the OP and could not find any reference to the amount of compensation the writer would receive, a copy of the press’s standard publishing contract or any details of the proposed financial relationship between the publisher and the author.

Perhaps PG failed to learn that one of the foundational commandments of small presses is, “Thou shalt never talk about money.” Perhaps the target market for small presses (and large) is limited to authors who have day jobs or inherited wealth. Small presses might want to include a disclaimer or statement of purpose that says something like, “We serve authors who don’t need to earn much money from their writing.”

In the broader world of businesses that have financial relationships with individuals, it is customary for the business to provide detailed disclosures of the legal and financial terms of those relationships early on.

PG just did a Google search for credit card offers and near the top of the first page of a site he picked at random, the following appeared (you don’t have to read the whole thing):

The standard variable APR for purchases and balance transfers for the Citi ThankYou® Premier Card is 15.49% – 24.49% based on your creditworthiness. Balance transfers must be completed within 2 months of account opening. The standard variable APR for cash advances is 26.24%. The variable penalty APR is up to 29.99% and may be applied if you make a late payment or make a payment that is returned. Minimum interest charge – $0.50. Annual fee – $95 for each primary cardholder. However, the annual fee is waived for the first 12 months. Fee for foreign purchases — None. Cash advance fee — either $10 or 5% of the amount of each cash advance, whichever is greater. Balance transfer fee — Either $5 or 3% of the amount of each transfer, whichever is greater. New cardmembers only. Subject to credit approval. Additional limitations, terms and conditions apply. You will be given further information when you apply.

In the nature of such disclosures, the writing style of Citi’s attorneys leaves a bit to be desired, but you see numbers there right on the website and you’ll see more numbers provided for anyone who applies before they accept the agreement.

If a publisher, small or large, is soliciting manuscripts, what’s wrong with a simple financial disclosure? On the website?

Here’s a start for such a disclosure:

Royalties payable to the author will be:

Hardback editions – 10% of the suggested retail price for the first 5,000 copies sold and 15% of the suggested retail price for additional copies sold thereafter.

Paperback editions – 8% of the suggested retail price for all copies sold.

Ebook editions – 25% of the net amount received by the publisher.

Royalties will be paid to the author every six months.

In the event unsold books by author are returned to the publisher for credit or reimbursement or amounts received by publisher are subject to chargebacks with respect to unsold or returned books, royalties shall not be payable to author for such books. If royalties have already been paid with respect to unsold or returned books, future royalties payable to the author will be subject to chargebacks for overpayment of royalties in prior periods.

Absent unusual circumstances, the maximum advance for a first book will be limited to $500.00.

The average royalty payments received all of publisher’s current authors total less than $250 per year.

PG also noted some discrepancies in the state of the publishing industry described by the publishers described in the OP.

Shade Mountain Press cited “the VIDA count and other research showing how underrepresented women are” in the book business.

This is what we know: Big Five publishers are more or less the only way for writers to get a book advance large enough to resemble a living annual wage. What is not commonly known is that the Big Five announce roughly 160 such deals a year for debut authors of literary fiction, which does not include Sci-Fi, YA, Thrillers, etc. (Not all are announced)

Here’s what is also not commonly known:

– 75% of those announced deals were given to female writers. Out of 320 debut deals given by Big Five publishers and their imprints in 2015 and 2016, only 84 were given to authors who identified as male and one to an author who identified as transgender. If you are one of the thousands upon thousands of non-female writers with a novel or story collection manuscript, you’ll be fighting for one of what appears to be roughly 40 new deals annually. A rather large inequity that pretty much no one talks about.

– 30% of the debut deals were given to writers who live in NYC (the city represents 2.6% of the total U.S. population). A rather large inequity that almost everyone talks about.

– Under 25% of those debut deals were given to writers with MFAs. According to The Atlantic, 3,000-4,000 writers graduate from MFA programs each year.

Some of the FutureBook conference’s most memorable moments came from speakers who addressed challenging issues and lobbied for awareness to drive the industry forward.

. . . .

During the conference, the collegial and congratulatory aspects of the program were occasionally punctuated by contrarian events, comments, personalities presenting healthily challenging viewpoints to an industry that might prefer an unrelieved reflection of itself as stable and successful.

. . . .

Richard Johnson: ‘The Industry Is Too Snobbish’

That woke everyone right up. Richard Johnson, the CEO of Bonnier Publishing, gave an opening keynote.

. . . .

“Books have the power to enrich everyone’s lives,” Johnson said, “particularly the youngsters that we sell to, the ones who need education and have got no money. We should be selling to those people. And we do, but the industry should as well. The industry is too snobbish still.”

He’s not wrong that his company’s focus on inclusivity has been on display to all. The fun caricatures of its staffers in all their diversity have been on the site for years, and some of us have written about this. As it turns out, these are the faces with which Johnson feels he was able to get ahead of the current acute need for egalitarianism in publishing, and he sees this as having set him and his company way ahead. He may not be wrong.

He took it farther, too, urging the business to think of itself as “an entertainment business, not the literary business. Sometimes we create literary masterpieces which is fantastic,” he said, “but we have to entertain people to attract people.”

. . . .

“And let’s not be afraid to say that: We are in the entertainment business.”

. . . .

Jeff Norton: ‘Publish 10-14 Books Per Imprint Per Year’

. . . .

In a resonant moment of the conference, Jeff Norton, the author and television producer (Awesome Media Entertainment) recalled a 2013 moment in the FutureBook conference’s “Big Ideas” session–missed this year–when Canongate’s Jamie Byng (who was on another panel this year) announced that he would publish only as many books in a year as he had staffers. Publishers, Byng asserted, simply were publishing too many books.

Today, more publishers are aware of this. Simon & Schuster UK’s Ian Chapman told Publishing Perspectives at Frankfurt that his company will produce 100 fewer titles this year and focus more on strong marketing. And for his part, Norton said that imprints should cap their output at 14 titles per year. That arbitrary figure was a joke, but the concept was not: Norton knows that the problem of over-production in many of today’s publishing markets is a real one.

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“Film is dying a slow, painful death. Books are at risk of becoming ‘niche products’ or simply intellectual property source material” for the burgeoning television production industry that has recaptured its audience with superb storytelling, production values, and streaming delivery onto every device in the digital arsenal.

“Netflix knows me,” Norton said. “Amazon knows me.” And yet, he said, he’s been trying for five years without success to get Hachette, his publisher, to correct the reader age-range on his Metawars books’ online listings.

PG posits that “publish fewer books” is also a reflection of the impact of self-published books by indie authors which are coming to dominate online ebook markets. As Author Earnings has demonstrated, indie authors and Amazon imprints combined are the leading sellers of adult ebook fiction on Amazon.

Additionally, Author Earnings has documented that sales through traditional outlets for print books – Barnes & Noble, other bookstore chains, Walmart and other mass merchandisers, etc., are declining. Amazon is where virtually all growth in print book sales is occurring :

41% of all traditionally-published print books are purchased online

69% of trade-pub adult non-fiction unit sales are online

63% of trade-pub adult fiction unit sales are online

As far as ebook sales are concerned, the more ebooks sold, the lower the share of sales from traditional publishers:

91% of online adult fiction sales were ebooks. Over half – 52% of these ebooks were published by either indie authors or Amazon-owned imprints

There is a direct linear relationship between the share of unit sales of ebooks and the share of ebook sales by either indie authors or Amazon-owned imprints – the more ebooks that are sold, the higher the number of sales by either indie authors or Amazon-owned imprints.

In the monster genre – Romance – only 34% of unit sales are made by traditional publishers.

In an underserved genre – African-American Fiction – only 26% of unit sales were made by traditional publishers (and only 4% of unit sales came from Big 5 publishers).

In the October 2 issue of Publishers Weekly, the publication revealed the results of its annual salary and jobs survey. One of the questions the 442 respondents answered was, What is the #1 issue facing the industry in 2017?

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The #1 challenge publishing faces is the limited number of online retailers

Although only 5 percent of responders named this as the prime problem, PW reported,

“…A number of publishers who commented on industry issues named Amazon–in one way or another–as the greatest challenge to book publishers.”

The relationship with Amazon has been fraught from the beginning. Yes, we hate Amazon because it is monopolistic–and more so every day. But where do many (most?) readers buy their books? Uh, Amazon.

In terms of creatively finding ways to drive the price down on individual titles, no other entity can surpass Amazon. This year we had the challenge of which seller will get the sale when the buyer clicks on the buy button. Book sellers other than the publisher received a boon from Amazon when the buy button went to the lowest bidder–the seller with the lowest price. Publishers have been inventively working to hold (or regain) that prime real estate. But that’s just the most recent challenge to publishing’s well-being that Amazon has either benignly or calculatingly posed. 2018 will doubtless add to Amazon’s list of ways to create publishing mayhem. (Not that publishing is being targeted; Amazon functions in the same cutthroat manner with every industry.)

The #1 challenge to publishing is too many books being published

Publishing looks to the Bowker Report to collect these numbers, and it takes some time for Bowker to assemble them, but this is how the stats stood in September 2016: More than 700,000 books were self-published in the U.S. in 2015, which is an increase of 375% since 2010! The number of traditionally published books climbed to over 300,000. The net effect is that the number of new books published each year in the U.S. has exploded by more than 600,000 since 2007, to well over 1 million annually. At the same time, more than 13 million previously published books are still available.

In 2016, the U.S. population was reported at 323.1 million. Think about how many avid readers would be needed to sustain the present explosion of available books. Is it any wonder that a new title has a few weeks at a retail outlet to sell through to a customer? And how is the reader supposed to ferret through this vast selection to find the books that interest him or her? The problem is staggering.

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The greatest challenge seen by publishers is flat sales

Twenty-five percent of the respondents are concerned about a publishing variable that is easy for each publisher to track–how many books sold this year? The sobering fact publishers picked this as their primary concern is that it’s core to the industry. Publishing’s function boils down to selling books. If it doesn’t succeed at this, it won’t succeed at all. And it isn’t like 2017 is the exception. No growth has occurred for five years.

As the PW article reports, “According to the Association of American Publishers’ recent StatShot report, total industry sales fell to $26.24 billon in 2016, down 5.1% from 2015. Between 2012 and 2016, sales fell every year except 2014, and over the five-year period sales dropped 5.2%. Within the trade segment, sales rose 1.5% in 2016 over 2015 and were up 1.3% in 2016 over 2012.”

If only Amazon would just go away, everything would be so much better in the world of Books & Such.

If only Amazon would increase its prices a lot, everything would be so much better in the world of Books & Such.

If only there weren’t so many books, mostly sold from Amazon, everything would be so much better in the world of Books & Such.

If only publishers could sell more books, everything would be so much better in the world of Books & Such.

If only we could return to the good old days.

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The simple fact is that the best way to make money in the book business in 2017 is to sell ebooks. All an indie author or a publisher needs to do is create an electronic book file, upload it to Amazon, etc., (or maybe just Amazon) and wait for the monthly checks to arrive.

PG suspects the math is pretty much the same for small and large publishers.

You can run a very lean publishing organization selling ebooks. (PG suspects most indie authors are a one-person publishing organization.)

No printing costs, no inventory management, no Ingram fees, no shipping fees, no returns and nobody needed to manage the whole printed book mess.

If you must have printed books, PG suspects that a print-on-demand operation like CreateSpace is probably the most profitable way of doing that if you track down the fully-loaded costs of all the various people and operations in creating, maintaining and managing an inventory of printed books.

It’s no wonder that traditional publishing is such a low-wage/low-profit business.

The underlying problem for Books & Such and a lot of other agents and publishers is that the reason authors pay them so much is that they are gatekeepers – gatekeepers to publishers who don’t want to spend time reading submissions from authors, gatekeepers to printed book sales via Barnes & Noble and other traditional bookstores.

Gatekeepers make their money by charging people who want to go through their gate. And gatekeepers in the book business don’t just charge a toll one time. The book deal that is closed to day will pay the large majority of the money the book generates to the gatekeepers that permitted the book to enter the traditional stream of book commerce.

And, to add insult to injury, the gatekeepers will continue to receive the same toll for the rest of the author’s life. Plus 70 years. The author will be dead and the agent will be dead and everybody who worked for the publisher when the book was released will be dead. But the tolls will continue.

Some time, PG needs to calculate the total payments made to gatekeepers during the hundred-odd years before the copyright expires on a book.

If the current US copyright laws had been place when Ernest Hemingway wrote, given that Hemingway died in 1961, his agent and publishers would continue to receive their gatekeeper tolls until 2031. Gatekeeping tolls in the form of agents’ fees and publisher’s share of book sales would still be payable for The Sun Also Rises, first published in 1926.

PG says fewer and fewer authors are interested in walking through those particular gates.

The simple reason is that there is an alternative and that alternative pays better than traditional publishing does for most authors. More and more writers are realizing that if they want to be professional authors and earn their living by writing, they are much more likely to reach their goal by self-publishing ebooks and selling them online.

In 2016, two-thirds of traditionally-published fiction and non-fiction books were sold online.

About 75% of adult fiction and non-fiction books (including both traditional and indie published) were sold online (77% of fiction, 72% of non-fiction) in 2016.

In early 2017, Big Five publisher sales on Amazon were 20.8%–or barely one fifth–of all Amazon US consumer ebook purchases.

As far as the earnings of individual authors who have debuted in the last three years:

250 Big Five authors are annually earning $25,000 or more from Amazon sales

200 recent small or medium publisher authors earn $25,000 or more from their Amazon sales annually

Over 1,000 indie authors who debuted in the last 3 years are earning more than $25,000 per year from Amazon sales

Looking at earnings of debut authors from the past five years, more indie authors are now earning a $50K-or-better living wage from Amazon than all of their Big Five and Small/Medium publisher peers put together.

Fewer than 115 Big Five-published authors and 45 small- or medium-publisher authors who debuted in the past five years are currently earning $100K/year from Amazon sales. Among indie authors of the same tenure, more than 425 of them are now at a six-figure run rate.

PG suggests that traditional publishing’s greatest challenge is demonstrated by numbers like this.

Ten years ago, Amazon released the first Kindle device. There had been electronic book reading devices before the Kindle and, indeed, the Sony ereader was actively in the market when Kindle arrived. (Others, like Rocketbook and Softbook, had perished for lack of interest.)

Kindle and Amazon succeeded where others failed for several reasons. First and foremost was the power of Amazon, which already had the attention of a very large segment of the book-reading and book-buying public. But Amazon helped themselves with three big breakthroughs — one technological and two commercial — which made what they were doing different from what had been done before.

The technological breakthrough was integrating the purchasing into the device, eliminating the two step “download and synch” process that previous ebook readers had required. Since wifi didn’t exist yet, executing on that required Amazon to take the risk on dial-up connection charges that MIGHT have been used by Kindle owners to do things other than make ebook purchases.

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The other commercial breakthrough was pricing. Amazon was willing to take real financial risks to present ebooks as a money-saving alternative to print. They wanted to establish a maximum ebook price of $9.99, so that’s what they charged even if the publisher’s price to them was higher and they had to take a loss on the sale.

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Back near the beginning of ebook time, a friend at Kobo put together a collection of the first two years of Shatzkin Files blogs into an ebook. Then, about a year ago, a British digital publishing operative named Simon Collinson felt the blogs were worth collecting into annual “books”. He did an extraordinary amount of work to arrange the blogs by subject and to give me the drafts of annual summaries. This turns out to be a pretty decent history of the ebook revolution since its dawning.

“Since wifi didn’t exist yet” in 2007, ten years ago when Amazon introduced its first Kindle, is an example of both MikeSpeak and MikeWorld.

The first version of the 802.11 wifi protocol was released in 1997. This was updated in 1999 with 802.11b to permit 11 Mbit/s link speeds which really got things going.

Within five years, wifi exploded to about 100 million users, tens of millions of wifi devices being sold, etc. PG can’t remember when he first installed wifi in Casa PG, but recalls regularly using hotel wifi in the early 2000’s.

PG has always viewed Shatzkin’s thoughts as reflective of the current thinking in traditional publishing.

Unfortunately, that thinking is consistently out of date and seems unable to draw any lessons from other businesses that have been diminished or destroyed by disruptive technology. The ebookstore, the ebook and the ease of self-publishing an ebook together constitute a hugely disruptive technology.

Traditional publishers are accustomed to paying only a small percentage of the revenue generated from book sales and licensing to the author. Of course, Amazon pays a much higher percentage to authors who self-publish via KDP. Depending on the pricing the author chooses, the majority of the price a reader pays for an ebook will flow through to the author.

Publishers are fond of talking about all the things they do that an indie author can’t do, chiefly getting printed books into traditional bookstores. From the publishers’ viewpoint, this sales channel is very important. From the author’s viewpoint, looking at the money the author actually receives from the physical bookstore channel, it’s less important.

Simply put, an author can often generate a higher income from a given book by self-publishing ebook and POD paperback editions only and selling exclusively through online bookstores than the author can generate by paying a much higher percentage of each book sold to a traditional publisher and accessing the physical bookstore channel. The publisher captures the lion’s share of income from physical book sales, so from the author’s viewpoint, that channel is much less important to his/her financial well-being than it is to the publisher’s.

If publishers were willing to enter into hardcopy only publishing agreements with authors, permitting authors to retain ebook rights for self-publication, business-savvy authors would be happy to sign such agreements. Even with low royalty rates, the hardcopy only agreement would generate net income to the author that the author would not otherwise receive while the author would benefit from the much higher percentage available from independently publishing his/her ebook editions.

One last and obvious point – twenty years ago publishers generated all of their income from print-only operations. If, as the traditional publishing press keeps saying, readers are returning to printed books and physical bookstores, a return to an earlier era of print-only publishing would seem to be a viable business proposition.

When Amazon.com burst onto the nascent online retail scene in 1995, the future seemed bleak for brick-and-mortar independent bookstores—which already faced competition from superstores like Barnes & Noble and Borders. Indeed, between 1995 and 2000, the number of independent bookstores in the United States plummeted 43%, according to the American Booksellers Association (ABA), a nonprofit trade association dedicated to the promotion of independent bookstores.

But then a funny thing happened. While pressure from Amazon forced Borders out of business in 2011, indie bookstores staged an unexpected comeback. Between 2009 and 2015, the ABA reported a 35% growth in the number of independent booksellers, from 1,651 stores to 2,227.

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Five years ago, [Ryan Raffaelli, an assistant professor in the Organizational Behavior unit at Harvard Business School] set out to discover how independent bookstores managed to survive and even thrive in spite of Amazon and other online retailers.

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Here are some of Raffaelli’s key findings so far, based on what he has found to be the “3 C’s” of independent bookselling’s resurgence: community, curation, and convening.

Community: Independent booksellers were some of the first to champion the idea of localism; bookstore owners across the nation promoted the idea of consumers supporting their local communities by shopping at neighborhood businesses. Indie bookstores won customers back from Amazon, Borders, and other big players by stressing a strong connection to local community values.

Curation: Independent booksellers began to focus on curating inventory that allowed them to provide a more personal and specialized customer experience. Rather than only recommending bestsellers, they developed personal relationships with customers by helping them discover up-and-coming authors and unexpected titles.

Convening: Independent booksellers also started to promote their stores as intellectual centers for convening customers with likeminded interests—offering lectures, book signings, game nights, children’s story times, young adult reading groups, even birthday parties. “In fact, some bookstores now host over 500 events a year that bring people together,” Raffaelli says.

PG is in favor of people being free to start and run businesses which they believe will provide useful products/services that customers will enjoy and pay for. According to the OP, that appears to be what the owners of Porter Square Books are trying to do.

Porter Square Books is located in Cambridge, Massachusetts.

For those unfamiliar with Cambridge, it is full of people who are those associated in one way or another with extremely expensive private universities – Harvard (estimated annual undergraduate cost of $63,025 for tuition, room, board, and fees) and the Massachusetts Institute of Technology (estimated annual undergraduate cost of $ $65,478 for tuition, room, board, and fees).

Harvard pays its full professors an average salary of $198,400 per year. The median price of a single-family home in Cambridge hit $1,675,000 during the first four months of 2016.

PG is not denigrating Cambridge or its institutions in any way. He has always enjoyed his many visits there. It’s a stimulating and active community environment and right across the river from downtown Boston which offers an even wider range of attractions and amenities for those who are able to afford them.

PG’s point is that the business environment in which Porter Square books operates is probably optimum for a physical bookstore in 2017 and also atypical of most US cities and suburbs.

The population of Cambridge is currently estimated at 105,162. Fargo, North Dakota, Charleston, South Carolina, and Green Bay, Wisconsin, have populations about the same size.

Green Bay has a median household income of $43,063. The median home price is $129,600.

PG wonders how Porter Square Books would do if it were operating in Green Bay.

A quick internet search found something PG had not expected, Readers Loft Bookstore in Bellevue, a suburb of Green Bay, which appears to be doing well as an indie. PG will leave his earlier remarks in place so you can see a failed snark setup in action.

This is a C-span video and PG apologizes for not being able to get it to embed.

If you studied at a university in Sydney, chances are you’d have a memory of one of Bob Gould’s shops. My first encounter was when I was 18 and had just moved out of home into Newtown, with an empty used bookshelf I found on the side of the street.

I unpacked and walked straight to Gould’s Book Arcade on King Street: a legendary, cavernous warehouse-type space, crammed floor to ceiling, side to side, with what seemed to be every used book and dust mite in the world.

The bearded Gould, then in his 60s, sat at the front desk, swamped in piles of paper and peering out into his realm. I asked him for a specific author – something Russian, ostentatious, arts degree-esque – and he slowly pointed from one side of the shop to the other, with a shrug: it could be anywhere out there.

The service was gruff, but it was also kind of perfect, and I spent hours tiptoeing through aisles and over piles that day. I never found the book I came for, but left with so many others that I had to catch the bus back home.

The federal Labor MP Andrew Leigh told his own, livelier memory of the shop in a parliamentary tribute to the activist and bookseller, who died in 2011.

“I was walking down an aisle and brushed past two precarious stacks of books on either side. Both collapsed on me, trapping me for about five minutes, until Bob heard my cries for help and ambled over,” Leigh said.

According to Natalie Gould – who has been running Gould’s with her mother, Bob’s first wife Mairi Petersen, since her father died in 2011– that risk of literary avalanche is one of her favourite things about it.

“It’s always been part of this place,” Natalie says.

. . . .

“It’s the book that falls on your head, or the book that you stumble over – it’s the one that you didn’t know you wanted,” she says. “That’s one of the things I love about this place … secondhand bookshops are much more interesting, and more fun.”

Gould’s Book Arcade has been the dusty wonder of Newtown since it opened on King Street 30-odd years ago, and soon the doors will close. Rising rents have collided with a dip in demand for tattered reads, magazines and preloved records – to say nothing of the looming threat of Amazon – and Natalie and Mairi can no longer afford to keep the place.

PG has certainly put in his time wandering around old and somewhat legendary bookstores with no discernible organizational principle, but he wonders if they are an idea that has come and gone.

Is it really fun to regularly stumble around an old store for significant numbers today’s college students and twenty-somethings?

PG can find far more exotic books online than he ever could ambling through a dozen physical stores. Perhaps it’s the incipient codgerdom talking, but PG would rather get the book instead of looking for the book.

He has no problem thinking of a great many more enjoyable activities than looking for books. When finding an interesting book required that he spend time looking through shelf after shelf for an interesting book, PG was willing to put in the time, but now that it’s not, he’d rather not be thumbing through crumbling paperbacks.

Whenever PG hears about an interesting book, it goes on an Amazon wish list and happily resides there, ready for instant download upon PG’s slightest whim. He doesn’t specifically think about it, but the time saved from book-searching goes into book reading which is much more fun.

It is no surprise that the public remarks at Frankfurt by Penguin Random House CEO Markus Dohle and Simon & Schuster CEO Carolyn Reidy contain gems worth pondering. Book publishing has been fortunate to have really smart people leading the biggest companies during our period of digital transition. The apparent collusion over the implementation of agency pricing — which is itself proving to be a mixed blessing — was definitely a collective setback and has to be seen as a very big mistake (that I didn’t see that way at the time.) But, for the most part, book publishers have done very well in a time of great turmoil, certainly better than other publishers of print or any other big media from the 20th century.

Now we have settled into a period of apparent stability. The two big shifts that were big challenges to navigate — from printed books to digital books and from in-store purchase to online purchase of the content — are no longer occurring at a dizzying pace. From the commercial publisher’s perspective, the ebook market is flat or declining and the print book share is holding its own.

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Dohle’s speech delivered virtually unqualified optimism. He is jubilant about the stability in the market with print holding an 80% share. (He takes a dig at the fact that prognosticators would have predicted that it could be ebooks that would hold the 80% share by now.

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Dohle points out that his company is now publishing John Green’s follow-up to “The Fault in Our Stars”. I’m sure his marketers will tell him that they’re aiming for lots of adult readers with their efforts, whatever the original intentions of the author were about the audience.

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Two observations from [Simon & Schuster CEO Carolyn] Reidy seemed extremely important to take on board. One is that self-publishing is taking a growing share of the market. She characterized the self-publishing share in America as “huge, no matter what statistics you use.” And the companion observation should be a wake-up call to publishers. As she was quoted by Michael Cader in Publishers Lunch:

“The romance market, which used to be huge in mass market, has pretty much dried up and gone to digital original. [And] it has put pressure on pricing of all ebooks…. Those are consumers who, if they wanted a book, they used to come to us, and now they go elsewhere.”

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The other elephant in the room which got no mention, as near as I can see, from either CEO, is Amazon. That growth in print sales that publishers are so happy about was given a huge boost by Amazon shifting promotional dollars from ebook-discounting to print-discounting when Agency forced them to reconsider their strategy.

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The growth of sales at Amazon presents a number of potential challenges to the big houses. It means that their biggest trading partner will push them for more margin. It means that the channel with the growth is one where big publishers don’t have an automatic advantage because of size. And, if the print sales being boosted in relation to digital is because Amazon’s pricing strategy can whipsaw the consumer in that way, it can also reverse itself if Amazon decides to change its strategy.

One additional point PG would add, the biggest elephant in Big Publishing’s room, is that Barnes & Noble is going to disappear.

Whether it continues to disappear slowly (Barnes and Noble has been closing 15-20 bookstores annually in the US for the last ten years) or if it collapses all at once (like Borders did seven years ago when 511 Borders superstores and 175 stores in the Waldenbooks Specialty Retail division closed and, within a few weeks, disappeared into bankruptcy court).

If Big Publishing continues to hitch its wagon to hard copy books, it will be relying upon a retail distribution network that becomes more mom and pop with each passing year.

A major marketing push for a new title through Barnes & Noble can be a powerful tool in launching books for big publishers. Doing the same thing through a bunch of shops run by Fred and Ethel that carry inventories perhaps 20% of the size (at best) of a typical Barnes & Noble is a whole different story.